Credit unions should prepare for a NCUSIF premium to be assessed.

 ALEXANDRIA, Va.—Stating the agency has attempted to avoid charging credit unions a premium during the pandemic in order to replenish Share Insurance Fund’s sliding equity ratio, NCUA Chairman Todd Harper suggested credit unions should nonetheless prepare for a premium to be assessed.

But the agency’s other two board members didn’t sound so convinced, and at least one of them would have to vote in favor for any premium to be charged in the future.

Harper, during the agency’s board meeting, also said premiums are only a short-term solution and the agency should work with Congress to obtain greater flexibility to manage the NCUSIF, so funds can be built up during good times to avoid premium assessments during difficult periods.

The potential for a premium comes at the same time the credit union trade associations have argued no premium is necessary for several reasons, including that the declining equity ratio is the result of an influx of deposits and not due to the failure of any CUs or losses to the fund.

Harper, in his first meeting as chairman, said there has just been too much ongoing pressure on the NCUSIF equity ratio in the past year, and more concerns lie ahead—especially with another round of stimulus likely heading consumers’ way.

“With the growth in shares likely to remain elevated in 2021, it is increasingly clear the question is no longer if we have to assess a Share Insurance premium, but when and how much,” stated Harper, who is the lone Democrat on the board.

The NCUSIF equity ratio stood at 1.26% as of Dec. 31, which is below the 1.3% equity ratio that is the standard measure for whether credit unions should be charged a premium to replenish the fund.

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